Music Marketing The Velocity Game

The 20,000 Foot View:  Music streaming has become so central to the functioning of the record label business model that labels are becoming beholden to streaming service optimisation. A shift towards ever-larger numbers of new releases targeted at streaming success threatens to dislocate the underlying business model of bigger record labels and cause a disconnect between what music audiences want and what they actually get. These are structural industry challenges with potentially seismic implications.

Key Insights

• Chasing stream            and market share through increased            and velocity of releases is            how record labels and artists            prioritising short-term streaming success over            strategy
• A central            and effect of the volume            is a demotion in value            the artist as a brand            the track – artists are            second-level format within streaming
• Pop and            are the top two preferred            for overall consumers, but hip            dominates the top            Spotify tracks                       of placings while pop was            distant second on           
• There is            risk that the vicious/virtuous circle            artist & revenue and playlist            influence is turning streaming into            genre micro-climate
• Placing bets            heavily streaming younger listeners to            hip hop streams risks alienating            streamers who are more likely            be paid users – label            strategy is becoming decoupled from            business strategy
• A tension            emerging among music streamers:            of            streamers are spending more time            to playlists but            prefer listening            music they choose

Companies and brands mentioned in this report: Spotify, Universal Music